Question

Please respond too this statement in 1-2 paragraphs (Explanation please) on on why you agree with it and what other additionaly information you can add too help improve it. , will give positive rating. anything will do please

Explain the externality that results from overfishing? Who is impacted?

Because fishing has become a popular task, a lot of fishes have been fished out of the sea all over the world which has led to negative consequences. For example, it was stated in the video that due to too much fishing was having a negative impact on a certain type of fish specie so fishers switched over to fishing cod fish. However, after a while they faced a new problem when too many cod fishes were being taken out of the water. This problem resulted in the fish market to suffer because there were no fish to take out anymore.

Answer 1

As fishing is a common resource so it is overexploited and overconsumed.

Overconsumption of fishing will lead to a negative externality which will reduce the quantity of fish available for every household in the market.

Since the market for fishing is perfectly competitive so the overproduction will and overconsumption will lead to a wastage of resources and make the market inefficient because the market output is more than the social optimum output level.

To correct this situation the government can impose taxes on consumption and impose restrictions on the areas which have been depleted and allow the fishing population to regenerate so that the consumption decreases and rice of fishing increases which will bring the output level in the market at the socially optimum level where Marginal social cost = marginal social benefit.